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Heavy schedule of shutdowns vs new capacities for 2020 in PP, PE markets

by Merve Madakbaşı -
  • 31/12/2019 (03:55)
Petrochemical companies have been revealing their operation plans for next year. Some US producers delayed the start-up of their new PE lines, while Asia is set for multiple start-ups in Q1 as well as scheduled turnarounds for spring 2020.

To track the most updated PP production news, please see PP Production News (For members only)
To track the most updated PE production news, please see PE Production News (For members only)

Most up-to-date news on US PE projects

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Formosa Plastics USA delayed the start-up of its new cracker and LDPE plant (400,000 tons/year) in Point Comfort, Texas while the recent date was not disclosed. Previously, the company revealed its plans to start up the brand new projects by December 2019.

After experiencing a technical glitch back in August this year, Sasol has recently ramped up the operating rates of its brand new cracker in Louisiana, the US. The Lake Charles Chemicals Project also houses a downstream LDPE unit (420,000 tons/year), which has been undergoing a start-up process since December.

LyondellBasell began the commissioning works of its new HDPE plant in La Porte, Texas in November. Sales volumes from the 500,000 tons/year plant are expected to come out in the first months of 2020.

An influx of American PE cargos left its mark on global markets including Southeast Asia, Turkey and Europe throughout 2019 amid closed doors to China due to a prolonged trade war between the US and China. Prices in all markets nosedived to their lowest levels in around 10 years amid supply glut across the board before some upward corrections occurred in the final month of the year.

China to welcome about 5 mil tons of additional PP, PE capacity

Wei Xing Petrochemical, Nan Shan Yi Wan, Sinopec Zhongke Refinery and Petrochemical and Hengli Petrochemical are among Chinese PE producers that planned to bring fresh capacities online in 2020.

Approximately, 3.5 million tons of PE capacity is on its way in China for the new year assuming that all goes as planned. Hengli was aiming to achieve commercial output in the first quarter after starting up its 400.000 tons/year PE plant in the beginning of 2020.

As for PP, Sinochem Quanzhou, Ningbo China, China Oriental and Sinopec Zhongke Refinery and Petrochemical were planning to bring new plants online during 2020. This is to say, more than 1.5 million tons/year of brand new capacity is scheduled to be added to China’s production.

Moreover, SK Innovation/SK Global Chemical planned to complete its expansion works in China, during which the company aimed to raise the capacity by 700,000 tons/year in 2020. Sinopec Zhongke Refinery and Petrochemical already completed mechanical works at its 550,000 tons/year plant in May 2019 and plans to start up it in Q2 2020 in stages.

The expected expansion in China’s overall production will probably continue to cast a shadow on global PE outlook, considering oversupply concerns amid macroeconomic fragility despite a recent trade truce between China and the US.

China is set for multiple PE turnarounds in spring

In the meantime, some Chinese companies unveiled their plans to start planned turnarounds between March and May. Sinopec Shanghai will shut its LDPE plant for a 3-week maintenance, while Shenhua Ningxia and Maruzen will also apply PE turnarounds, which means an output loss of more than 800,000 tons/year, in total.

For PP, Sinopec Zhenhai and Sinopec SK Wuhan plan to shut their plants in April-June, 2020 for scheduled turnarounds.

Brand new facilities in Southeast Asia

PT Chandra Asri’s new HDPE, LLDPE and mLLDPE units in Indonesia are slated to start operations in early 2020, according to ChemOrbis Production News. Malaysian Petronas is expected to start commercial runs at its new LLDPE and PP plants with a combined capacity of more than 1 million tons per year in H2 2020, furthermore.

Hyosung Vietnam Group is expected to start up one of the new units at its new complex at Ba Ria-Vung Tau in early 2020. The start-up of the plant was initially slated for Q3 2019.

India’s IOC also plans to bring the second line of its new PP plant located at Paradip online in Q1. The first line of the facility was to come on-stream back in July 2019.

Saudi Arabian producers to start 2020 with shutdowns

Rabigh Refining and Petrochemical (Petro Rabigh) plans to conduct PP and PE maintenance in January-February. Accordingly, the company will shut its Rabigh units with a combined capacity of 1.4 million tons per year.

Another Saudi company, SHARQ (Eastern Petrochemical Company) aims to shut its HDPE and LLDPE lines during the first quarter of 2020. Located in Al Jubail, each of the lines has a production capacity of 400,000 tons/year, according to sources familiar with the matter.
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